How brokers can avoid legal liability in the era of COVID-19

Insureds tend to expect that brokers will advise them on the types of insurance that may be needed for their business. (Photo: Free Use Image/ALM Media archives)

Insurance brokers may be exposed to liability for a variety of reasons, but the most common mistake that leads to exposure is a failure to procure insurance for an insured.

Normally, brokers have a duty to exercise reasonable care in procuring the insured’s requested coverage, and the broker assumes only those duties found in an agency relationship. Most state laws and regulations require the broker to use reasonable care, diligence and judgment in procuring the insurance requested by an insured.